I, 34, plan to buy a pure life cover or term insurance. I, however, feel the premium quoted by my agent is high. Is it possible to reduce the premium?
The premium cannot be reduced in the middle of the policy tenure. There were some products like unit-linked insurance policies (Ulips), which had the option to reduce the regular premium. This option, however, was discontinued from September 1, 2010, when the insurance regulator introduced new Ulip guidelines. You should carefully weigh all the coverage options, including premium, before the policy starts, or, at least consider within the free-look period, that is, within 15 days of the receipt of the policy bond. Therein lies an option with you to cancel the policy and select a plan with a lower premium or that which suits your needs.
I have quoted my younger sister as the nominee for my life insurance policy. However, according to my will, my two sons are my legal heirs. In case of a claim following my death, would the nominee be entitled to the policy proceeds or the legal heirs?
The proceeds are payable to the nominee, if it has been explicitly mentioned by the policyholder in the proposal form. If no nominee is mentioned, or the nomination gets challenged by any other legal heir through a restraint order from the court, a succession document is required from the court, mentioning who the claim needs to be discharged to.
When I was buying an insurance policy last week, the broker kept flitting between the terms assurance and insurance. What is the difference between the two?
In common usage, both are used interchangeably. But, technically speaking, the word 'assurance' is related to human life as an asset, while 'insurance' relates to non-life physical assets covered under general insurance. However, in broad terms, the word 'insurance' encompasses all types of insurance, whether life or non-life.
The writer is CEO, Bajaj Allianz Life Insurance.
The views expressed are his own. Send your queries to yourmoney@bsmail.in
